Saturday, 5 September 2009

Be Thankful For Bickering Nations

We can only hope that the G20 group will reach no substantive agreement as they argue for different measures, and so will not further damage their economies.

Gordon Brown has argued that nations must keep on overspending. This is the tactic that has failed to work in Britain and the USA, as the economies of France and Germany, which conspicuously did not try to spend their way out of recession, start to recover. Since Britain was best placed to weather the recession according to one G. Brown of Westminster and Kirkcaldy and Cowdenbeath, the massive increase in already bloated public spending cannot have done much good.

A massive splurge of public spending during recession does not work to help recovery. It can create artificial growth (or of slow-down in contraction of the economy) in the same way as spending on your credit card can artificially increase your spending power. It does so at the expense of the future and also at the expense of private-sector growth. In the meantime it damages the free market as government interferes, intervenes and distorts the labour market.

If Britain is ever to recover we need other economies to be successful. Let us hope that other governments do not heed Brown, and continue to reduce their 'stimulus' spending.

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